Reputation is everything these days. It’s not something you can see or touch but it’s all powerful. Through it, you get stuffs like brand loyalty and trust, the very substance that makes the world go round. Reputation is pretty much like karma where you can swing either positively or negatively with the exception you don’t need to die before you reap the next cycle of existence. And in the digital world of social media and social networking, the karmic cycle of reputation is measured in hours, if not minutes.

 

And to question the reputation of Volkswagen nowadays … well, it has seen better days.

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During those heydays, Volkswagen Group Malaysia (or VGM) was over the moon, having sold as much as 13,000 cars in 2012, something that even the combined sales volume of Peugeot and Mazda couldn’t match. As a matter of fact it has been enjoying double digit growth for years prior to this. Nothing could possibly stop them from overtaking Toyota by being the best selling non-national automotive brand and achieve world domination.

 

Then, a year later, that bag of troubles relating to the DSG transmission and other technical issues hit the fan and the disproportionate provision for sales and after sales could not be better demonstrated. It was spectacular if not painful for the German giant to be hounded by thousands of irate customers both local and international and Malaysia closed only 9,538units in 2013. Instead of growth, the sales chart showed a graph plunging 26%. As mercurial as it may have been in its rise, it’s drop in the popularity grap outpaces even our most controversial ministers

 

Since then, VGM has executed numerous activities and initiatives aimed at restoring some of its luster:-

 

“We acknowledge that we have made mistakes in the past, but (now) we want to over-fulfill expectations – we want to go the extra mile,” said Armin Keller, Managing Director of Volkswagen during a press conference in 20 October 2014 where he announced that VGM will be increasing their service capacity by 30% nationwide, through the expansion of existing service centres, the opening of new dealerships including 3S and 4S centres, and an increase in the number of technicians. VGM has since made some progress on this promise and continue to work towards full compliance.

 

On 3^rd November, VGM kicked off its Volkswagen Expert Program where ten certified master technicians are brought over to Malaysia for training and experience transfer. They then even teamed up with controversial transport solutions provider Uber in organizing a “Charity Drive with the Stars”.

 

The pinnacle of these initiatives would be the Volkswagen Das Auto event that was organized in early December 2014. It was the final and biggest pledge VGM has ever done, short of slitting their palms and signing a contract with blood, where the management commits over RM20million over the course of 3 years to set up Technical Competence Centre facilities, a Volkswagen Parts Centre, first-of-its-kind Volkswagen Brand Store plus other initiatives. They even have a new tagline now; Always By Your Side.

“These actions will deliver the kind of service our customers would expect, and help us to earn the trust of our Malaysian customers,” said Mr Keller at the event.

Well and good, Mr Keller. But have you restored consumer confidence?

 

YOU CAN’T BUILD A REPUTATION ON WHAT YOU ARE GOING TO DO – Henry Ford

 

The year 2014 ended with VGM selling 8,916 units. That’s worse than the year before despite having a full year to sell the CKD Polo sedan & hatchback, the most affordable VW model to date and Ford has managed to usurp the Best Selling Continental brand in Malaysia from them.  It didn’t help when a group of disgruntled owners staged a street protest at VGM’s HQ in March 2014 that made all the issues a lot more public and in a manner that’s as conspicuous as someone’s wife in pajamas waiting outside a bar with a rolling pin for her husband to come out.

But let’s be fair, most of these initiatives took place in Q3/Q4 of 2014, post-protest so for its effects to be felt, you’ve got to give it time to take hold and mature. The good news is VGM almost managed to double the number of units sold in January 2015 compared to the month before. The bad news is that quantity of 417 units is not even half of the 910 units sold in the corresponding month a year before.

 

But you can’t blame VGM entirely for the poor numbers; remember pre-General Election 2013 where both sides of the political divide promised to reduce car prices and everyone was adopting a wait-and-see approach? Well, the same is happening with the imminent execution of the Goods and Services Tax, something not even car companies dare say with certainty how it would affect their business.

And so everyone is just chilling and holding out to see how GST would affect our lives – while the industry suffers with almost ALL brands reporting a significant drop in sales.

 

But GST aside, you’d still buy a vehicle if you need to buy a vehicle – so with all that has been put into place by VGM, is it safe to put a deposit for a Volkswagen vehicle today? For that, you’ll have to read Part II